Government Puts Brakes On Whiplash Reforms

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In a move that is being heralded as a "victory for common sense", the Government have revealed that they could be delaying proposed reforms to the way insurance companies handle personal injury claims.

First proposed by then-Chancellor George Osborne, the proposals looked to eradicate all compensation claims for soft tissue damage and raise the small claims limit to £5,000.

Newly appointed Justice Secretary Liz Truss is allegedly rethinking the plans, which could have restricted access to justice for many people injured in an accident.

Responding to the latest development in what has descended into a bitter feud between insurers and the personal injury industry, Anna Thompson – Personal Injury Associate – explains how a collaborative approach is required if the industry is to tackle fraudulent claims.

The most recent proposals, outlined by former Chancellor George Osborne during last year's autumn statement, would have allegedly resulted in a £1billion reduction in the cost of providing motor insurance, savings that would have supposedly been passed on to consumers.

In a letter seen by the Law Gazette, it appears that some plans are still being considered, as Ministry of Justice spokesperson is quoted as saying that the department remain committed to reducing the number, and cost, of whiplash claims in the UK.

Rising Premiums

The central point during this debate is the eventual cost to premiums, with insurers claiming that fraudulent or over-exaggerated whiplash injuries are causing the average motorist to spend more than necessary on their premiums, as these claims increase the amount it costs to provide insurance.

On the other hand, those working in the personal injury industry have claimed that these attacks on compensation claims will leave motorists unable to seek justice if they are involved in an accident that causes them any kind of monetary loss.

With Osborne's proposals including a removal of all compensation claims for any kind of soft tissue damage, it appeared as though it was not only motorists that were being targeted; such a move would affect the entire personal injury industry and could restrict people claiming for damages when they trip or fall at work or in a public place due to another's negligence.

There was a perception that the plans were based on the insurance industry's rhetoric, instead of factual evidence, as Anna explains:

"We welcome this government U-turn, as the previous proposals would have been devastating for those injured in accidents that were not their fault."

"The insurance industry have done a fantastic job at downplaying the effects of soft tissue damage, however it's crucial to remember that such injuries can take a long time to recover, with some claimants suffering mild pain for years after a road traffic accident."

"As expressed by APIL, Osborne's proposals seemed to be based upon the persistent lobbying by the insurance industry, rather than independent evidence."

"Most damaging to the insurance industry's rhetoric is the fact that the costs to insurers from personal injury claims are falling and yet premiums continue to rise. This means that insurers have continually failed to pass on savings to motorise from other recent changes that were implemented to reduce whiplash claims, which were welcomed by APIL and have generally been successful."

"Both sectors need to come together to tackle fraudulent claims, as they are as damaging for us as they are for insurers; it is through this collaborative approach that we can deliver savings for motorists while ensuring those who suffer because of an accident can claim back their losses."

"Ultimately, we are always going to defend our clients'right to seek justice after an accident, whether this is on the road or elsewhere. The proposals that were scrapped seriously would have affected access to justice, and we hope that the MoJ come back with suggestions that are based on factual evidence as opposed to public perception."

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